Achieving the Common Good (Part 1)

Achieving an economy fit for the purpose of advancing the common good will require a completely new vision of society and economy and radical action over a generational timescale. It took a decade or more to destroy manufacturing industry and throw away the country’s engineering heritage of centuries. It will take a similar length of time to restore this fundamentally important sector. But this restoration and much else could be done if the will and commitment were there and a stop was put to the kow-towing to plutocratic interests and lobbyists.
What the country is now left with is the direst version of extractive capitalism and the ethical vacuum and greed that are integral to it. This is the dysfunctional economy that bore its most poisoned fruit in the banking disaster and the subsequent punishment of austerity that has been imposed with callous unfairness by a government of similar persuasion. So what should future (hypothetical) governments of principle do to move towards a system that will further the common good?
First, such governments must undertake a pro-active, comprehensive and long-range economic policy that will regenerate manufacturing industry, engineering and the industrial sector more widely. In the restoration of a major manufacturing sector the focus should not simply be on final assembly but on rebuilding the all-important supply chain too. As part of the policy, there must also be increased and sustained investment in scientific, engineering and medical research.
This emphasis is not only to benefit the economy as a whole, but also to generate full time jobs worth doing for the forsaken young people throughout the country, but particularly in the formerly industrial Midlands and the shattered North. London and the South East should not be given so much favour nor allowed to continue drawing off so much investment and hoovering up most of the job opportunities that are going.
The foundations of this economic policy should be resolutely and pro-actively Keynesian. This means that major projects would be established - and often delivered - by government. It should also involve setting up public sector ‘exemplar institutions’ with a service rather than a profit ethos, such as municipal banks, to introduce some real competition and force recalcitrant elements in the private sector to reform their ways. This applies most strongly to banking where we are about a year away from the next banking scandal, having already experienced at least three.
Governments must escape the thrall of so-called ‘markets’ and establish these exemplary public service institutions wherever they are needed – such as in rail transport and energy supply as possible steps towards the preferable option of renationalisation. Such a policy will also introduce two-way traffic instead of the dead end one way system where movement is only possible from public sector to private sector. In future there must also be exemplary and inspirational conduct by national leaders, both political and business, whether private or public. If they can’t deliver this, they’re not fit to lead either country or company.
Corporate governance should be comprehensively reformed to deal once and for all with the gross executive excesses and there should be employee representation on company boards. The government should also set up programmes to bring about the crucial ethical re-education needed, particularly in finance and business. Don’t go on about ‘human nature’, it’s what we make it. There needs also to be re-education as to what constitutes desirable professions for young people to aspire to - with an enhanced status for engineering careers and less siphoning off of young talent into the banking and finance morass.
Voluntary organisations with the common good at heart need encouragement and re-stored levels of resource rather than year after year of cutbacks. Political parties should become much less tribalistic and knockabout, but confident in having bold and constructive alternatives, including furtherance of the common good, presented to the electorate.
Young people, who are yet to be shorn of their ideals and much less ingrained in their ways could take the lead in this, taking full advantage of modern technology with its freedoms and demonstrated possibilities for organisation. Citizenship programmes should be expanded and recast in terms of enhancing the common good – again with a major input from young people. All this and more, to be sustained for many years.
In the reduction of the fiscal deficit, the timescale should be revised as the benefits of sustainable and balanced economic growth are realised. This will allow further productive investment and active economic management. If this is done, the present cuts dominated timescale could be improved upon and austerity ditched. More emphasis should be placed on taxation and less on cutting expenditure, leaving room for industrial investment. There are several reasons for this.
Reducing public expenditure on capital projects directly reduces employment, income tax, National Insurance, VAT and other tax receipts. It also increases government expenditure under different heads of account - such as unemployment benefit. In Keynesian terms the cuts will also produce a depressing reverse multiplier effect - the knock on negative consequences of people having less to spend.
The bulk of the burden of present government policies is born by young people and those who are less well off either seeking work, in work of some sort or unable to work. This is wrong both morally and in economic terms. There should be a mandatory living wage that is not also a maximum wage. The introduction of this will also give a positive multiplier effect. Zero hours contracts should be abolished - except possibly in the boardroom. Why do companies need a CEO on hand all the time? Just bring them in for an hour or two to make a couple of decisions when needed.
The gaping loopholes deliberately left in the tax system by governments and their advisers invite and encourage tax dodging and should be closed and ‘tax havens’ close to home and further afield should be shut down. Those who can afford to pay more in direct taxation should do so. Socially responsible rich individuals here and abroad have already declared their willingness to contribute more in this way. This contrasts with the partisan picture that’s been painted of a mass executive exodus and a decline in entrepreneurial activity. These are just repeated and self-interested cries of 'wolf!' We can scrape along with fewer executives on bloated salaries, bonuses, golden hellos and padded out retirement packages.
We should encourage public-spirited attitudes in corporations and begin a return to loyalty to country and community. There is little or no historic correlation between entrepreneurial activity and taxation of income at higher levels. Perceptions dependent on the direction of travel fade over time - there was unrestrained joy at the introduction of a 60% income tax rate when this was reduced from 83% in the 1980s.
In any case, most of those paying the highest rate of income tax are internal promotions in large companies and not entrepreneurs, whose motivation is not driven solely by money. Ordinary people in their day to day consumption should be enabled to choose products made in this country and not be constantly deceived by false labelling as to contents or origins.
A future responsible government should work towards the introduction of a financial transactions tax rather than dodge it and frustrate the efforts of other countries as the present government has done. A government for the common good should also take the lead on a revised international approach to the foundations of trade. Globalisation is not free trade - far from it.
There should be an inter-governmental push to close down those tax havens and rein in globalised corporations and their tax dodging, grasping, unprincipled and hypocritical owners. There should be less willingness to accept excuses from these self-serving commercial outfits or from countries with unfair and unsavoury economic and social practices. The common good should come before mountainous private profits. The sooner this process is started the sooner will we have a more societies both at home and internationally.